All Forum Posts by: Liam Goble

I'm curious why you would want to keep your rates below market rent. I understand if the residents are 100% awesome, you may 'shadow' the market rate a little (5-10% below market), but if done right, can't a turnover happen rather quickly?

@Sean Smith Do you plan to handle all of the property management yourself? What about the unexpected repairs?

When I run my numbers, I take my gross anticipated rent, then assume 10% for property management, 10% vacancy and 10% repair reserves. I know that's a large slice off the top, but I would rather be conservative (and these numbers may not be all that conservative anyway).

Lastly, have you used any of the online resources for evaluating the rent? I generally use rentometer.com to give me a general feel for if the units are relatively reasonably priced or not.

@Zachary Lowe from what I learned with my process is that while we (as investors) may value a property based on the cash flow, banks will value ANY property that has 4 or less units and no commercial spaces based on the recent comps. If there are any commercial spaces, or 5+ rental units, then the building gets valued on the NOI.

Can all of the properties be combined onto one deed? That would obviously complicate the exit strategy many years in the future though.

@Joseph C. @Joshua Dorkin My vote is for (State College PA) Pittsburgh or Philly!

I just finished a complete gut rehab on half of a duplex, which was in similar condition to what you describe. It needed wiring update, subfloors removed and replaced, new flooring, new bathroom, new kitchen, trash/pet waste/people waste/etc removed.

I put $15k into the place and about 500 hours of my time. At 6mos later, the property appraised at only +$10k from my purchase. I would be upset if the property didn't cash flow as well as it does ($390/month for a cash on cash return of about 21% AFTER the rehab).

If I had subbed out the work, I would have spent approximately $14k additional (400 hours @ $35/hr; assuming some efficiency gains from subs who specialize).

All in all, I gained valuable experience, showed my Realtor what I am willing to tackle, learned what I like to do vs hate doing, etc. If I was living on my cash flow from rentals, I would continue to purchase these UFUOs (Unique Fixer Upper Opportunities), fix them and rent them.

Good luck.

@Louise Whidby I actually had no capital when I started. I borrowed funds from some friends. They essentially gave me a personal loan which I then used to purchase my first SFH rental. A year and a half later, I'm looking to partner with some family.

Let me know if I can help. Good luck!

@Gene Hazley Welcome to BP. There is an expansive fountain of information on this website. I started here about four months ago and have made awesome connections around the country and learned a significant amount by reading other's successes and failures.

Good luck with your REI plans.

@Martin Zawarski You may be right that I'm a little light on my holding costs. I had my holding costs as follows:

Electric - $30/month (I only pay $40 in my personal residence and I'm an all electric residence)
Loan - $200/month (interest only at 5%...yes, it's a pretty good deal)
Heat - $40/month w/ new boiler
Taxes - $100/month
Insurance - $30/month ($350/year

Does it look like I'm missing anything?

@Marcus Johnson I've actually discussed that number with my contractor. We've got a better solution which is about 1/3 the cost of the counter tops I have listed. As I mention, my estimates are conservative, so I should come in lower than what I have proposed.

@Mike D'Arrigo I'll definitely be in touch once I get you my criteria...probably for a place in Indy.